Burnett, Firm File Dueling Lawsuits

So-called reality television has made a fortune exposing contestants’ love of money. Now a pair of lawsuits involving the indisputable king of reality TV has pulled back the curtain to reveal how the high-stakes reality business really works.

Late last week, Mark Burnett, the creator of the hit television shows “Survivor” and “The Apprentice,” sued Madison Road Entertainment, a Los Angeles production firm, accusing it of fraudulently misrepresenting its relationship with him.

Burnett alleges that the firm, which helped lure companies to place their products in episodes of “The Apprentice” on General Electric Co.’s NBC network during the show’s second and third seasons, overcharged advertisers, demanded “exorbitant” fees and pocketed money that should have gone to him.

On Wednesday, Madison Road countersued, accusing Burnett of defamation and libel, not to mention “sheer greed and arrogance.” The firm claims it was Burnett -- not Madison Road -- who drove up the price of getting a product front and center on “The Apprentice” to as much as $5 million.

“Then when the market wouldn’t bear his fees he looked for a scapegoat,” says the countersuit, which seeks at least $40 million in damages. “Indeed ... it was Madison Road who began questioning the outlandish fees demanded by Burnett’s companies, not the other way around.”

The dueling suits provide a rare glimpse into the usually closed-door world of reality TV, where the need to keep a show’s outcome secret until airtime has created a culture of silence.

The suits also reveal how the popularity of reality shows has seduced advertisers such as Procter & Gamble Co., Levi Strauss & Co. and Mars Inc., which have been willing to pay more than $2 million to secure starring roles for their products alongside “The Apprentice” host Donald Trump.

“Product placement is no place for sissies,” said Stuart Fischoff, media psychologist with Cal State L.A. “People are out there, trying to gobble up as much land as they can. It’s just like the land grab of the 1800s, but the landscape here is television, not Kansas.... This is the wild and woolly West.”

“The Apprentice” has been at the forefront of product placement deals because it builds entire episodes around contestants completing specific tasks, many of which feature an advertiser’s wares. For example, last fall would-be apprentices were asked to design a bottle for a new Pepsi beverage.

It was earlier that year, after “The Apprentice’s” first season debuted to huge ratings, that Madison Road approached Burnett and offered to help solicit “task sponsors,” or companies willing to pay to have episodes built around their products, court papers show.

In exchange for providing that service, Madison Road earned a fee -- paid by the advertisers, not Burnett -- that was based on how well the resulting episode performed in the ratings, Madison Road’s suit alleges.

Madison Road helped bring at least three major companies to Burnett: Procter & Gamble, Levi Strauss and Mars.

But Burnett claims in his lawsuit, filed March 3 in Los Angeles Superior Court, that Madison Road wrongly told advertisers that it owned exclusive rights to so-called brand integration deals on “The Apprentice” -- a charge the countersuit disputes.

Burnett’s suit says that Madison Road’s business practices caused his company, Mark Burnett Productions, to receive fees “significantly smaller” than what the sponsors were willing to pay. The suit also accuses Madison Road of “alienating sponsors, media agencies and advertising agencies” that might otherwise have done business with Burnett, and of marking up fees by as much as 250%.

Madison Road’s response, as articulated in its counterclaim: “That is an outright lie.”

Calling Burnett “the 800-pound gorilla” of reality TV, the suit accuses him of “bullying” and of fabricating falsehoods solely to eliminate Madison Road as a competitor to his own new branded entertainment company, which it claims opened its doors the same week Burnett filed his suit.

“Emulating the conniving, unethical and devious behavior that often leads to success for his reality show contestants, Burnett has used lies to undermine his competition,” says the countersuit.

Madison Road’s attorney, Martin Singer, said his clients decided to countersue because Burnett has tried to “destroy” them, both with the lawsuit and with an earlier cease-and-desist letter his firm distributed to Madison Avenue advertising firms.

“This is a case of David versus Goliath,” Singer said. “The money is not the story, but rather what happens when someone tries to intimidate someone and tries to put them out of business.”

Mark Burnett’s attorney, Steven Marenberg, declined to comment, saying he hadn’t yet reviewed Madison Road’s suit.

Beyond the charges and countercharges, what emerges in the lawsuits is a stark portrait of how fiercely TV producers play advertisers off against each other in pursuit of the almighty dollar. Madison Road’s countersuit includes several e-mails sent by a Burnett underling that purport to show how deals got made.

In one, Kevin Harris, co-executive producer at Mark Burnett Productions, described how he planned to drive the price of product placement even higher by having contestants produce a 30-second TV ad for a product.

“We are going to do something crazy and go with the highest bidder

In another e-mail, Harris praised Madison Road’s efforts and revealed plans to make a promotional reel featuring some of the company’s successes to lure advertisers for the next season. The teaser, the e-mail said, would feature “fast cutting of Donald -- [saying] ‘Crest is the biggest’ ‘I have worn Levis since I was 2’ ‘I love M&Ms;’ ‘Unilever is the biggest company in the world’ all with the MONEY MONEY MONEY song over the top. This should get us 2 million plus a task.”